The Search for the Key: Aid, Investment and Policies in Africa
Author(s)
Dollar, David; Easterly, W.
Abstract
The traditional aid-to-investment-to growth linkages are not very robust, especially for African economies. Aid does not necessarily finance investment and investment does not necessarily promote growth. Differences in economic policy, on the other hand, can explain much of the difference in growth performances. Furthermore, domestic politics rather than aid or conditionality has been the main determinant of policy reform. Where societies and governments have succeeded in putting growth-enhancing policies into place, aid has provided useful support. The combination of good policies and aid has created a productive environment for private investment and growth.
